FUJAIRAH DATA: Oil product stocks extend slump across all categories

Oil product inventories at the UAE's Port of Fujairah declined 13% in the week ended May 26, with all categories showing declines led by a 22% drop in middle distillates to a record low, according to Fujairah Oil Industry Zone data published May 28.

The total fell to 17.894 million barrels, a four-month low. Middle distillates such as jet fuel and diesel fell to 1.006 million barrels, the lowest since the port began sharing the data with Platts, part of S&P Global Commodity Insights, in 2017.

Light distillates, including gasoline and naphtha, dropped 12% to 7.293 million barrels, a two-month low, while heavy distillates used as fuel oil for power generation and shipping fell 13% to 9.595 million barrels, the lowest in two weeks.

Gasoil and diesel shipments from Fujairah are averaging 114,000 b/d for May, the second consecutive month above 100,000 b/d, according to S&P Global Commodities at Sea cargo-tracking data. Mozambique, Djibouti, and Oman are the top destinations for this month.

France is the only destination for jet fuel shipments from Fujairah in May at 26,000 b/d, the first such shipment to France since May 2022, according to the cargo-tracking data.

Fuel oil exports from Fujairah are averaging 281,000 b/d in May, led by Singapore and South Korea, the data show. Iraq is also set to get fuel oil from Fujairah this month for the first time since January 2021.

Bunker demand stable to lukewarm

At the Fujairah hub, sellers were reportedly keen to draw down their high-sulfur fuel oil cargoes over the past week, stiffening competition among suppliers and posing significant downsides to delivered premiums.

Amid adequate HSFO cargo availabilities and largely healthy barging schedules for buyers' prompt requirements, suppliers around the neighboring Khor Fakkan hub have also been offering aggressively, keeping demand broadly supported.

The Platts-assessed Fujairah-delivered 380 CST HSFO bunker premium to the fuel oil 380 CST 3.5%S FOB Arab Gulf cargoes most recently tumbled to an over 16-month low of $6.44/mt on May 23, before a marginal rebound to $7.65/mt May 27. The premium was last lower at $6.23/mt on Jan. 23.

Fujairah's HSFO bunker premiums have averaged $15.86/mt so far in May, almost halving from $29.55/mt across April.

Suppliers of low-sulfur fuel oil were also mostly eager to sell outstanding inventories by the end of May, buoying overall selling activity in the segment. Recent offers were also for end-May through very early June refueling stems, with prompt barging availabilities mostly remaining healthy.

"It's heavily backwardated [on LSFO], so it's better to sell these off... HSFO might be tighter next month as the summer [season] steps up," a Fujairah-based bunker supplier said May 28.

Platts, part of S&P Global Commodity Insights, assessed the Fujairah-delivered 0.5%S marine fuel bunker premium over the benchmark FOB Singapore Marine Fuel 0.5%S cargo value at an average of $6.46/mt over May 2-27, below $9.22/mt in April.